The Benefits of Coronavirus Suppression: A Cost-Benefit Analysis of the Response to the First Wave of COVID-19

This paper estimates the benefits and costs of state suppression policies to “bend the curve” during the initial outbreak of COVID-19 in the United States. Relative to a baseline in which only the infected and at-risk populations mitigate the spread of coronavirus, we estimate that total benefits of suppression policies are between $440 billion and $1,049 billion up to August 4, 2020. We employ a value-of-production approach that values the benefits of each prevented COVID-19 death as avoided losses to total production. The production value of life differs significantly from the value of a statistical life (VSL) commonly employed in cost-benefit analysis, and we identify several problems with using the VSL. Relative to private mitigation, the costs of suppression policies are estimated to be between $255 billion and $464 billion. The cost estimate is based on suppression policies being enforced in the United States for between 50 and 91 days, which reflects that many states lifted stay-at-home orders and nonessential business closures in May 2020. Our results indicate that the net benefits of suppression policies to slow the spread of COVID-19 are likely positive and may be substantial, but given significant uncertainty, net benefits may be close to zero.